Venezuelan Oil: A Century of Foreign Influence and U.S. Control

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By Ronald Dwyer | January 3, 2026 | Caracas, Venezuela

Venezuela, home to the world’s largest proven oil reserves, has long been a focal point of global energy politics. Its relationship with the United States has evolved over more than a century, culminating in the unprecedented U.S. control of Venezuelan oil operations following the capture of President Nicolás Maduro in early January 2026.

Early Foreign Domination
Oil was first discovered in Venezuela’s Maracaibo Basin in the 1910s. By the 1920s, American and European companies, including Standard Oil, Gulf Oil, and Shell, dominated exploration, drilling, and exports. These firms controlled most profits, while the Venezuelan government collected royalties and taxes. By the mid-20th century, Venezuela had become one of the world’s top oil exporters, yet foreign companies remained in control.

Nationalization and PDVSA
In 1976, the Venezuelan government nationalized its oil industry, creating Petróleos de Venezuela, S.A. (PDVSA). Ownership of oil reserves transferred fully to the state. As is their right. Foreign companies could still participate through joint ventures but no longer controlled the resources. U.S. refineries continued to rely on Venezuelan crude, maintaining a strong economic relationship without direct ownership.

The Chávez Era
With Hugo Chávez’s election in 1999, Venezuela shifted toward socialist policies and increased state control over oil profits. PDVSA revenues funded expansive social programs, while foreign companies faced growing restrictions. Despite this, U.S. refineries continued importing Venezuelan oil, though production and output began to decline.

Maduro’s Challenges and Sanctions
Under Nicolás Maduro, Venezuela’s oil industry struggled amid mismanagement, economic collapse, and U.S.-led sanctions targeting PDVSA. By 2025, American companies were largely cut off from legal operations, while Russia, China, and Cuba became key partners in sustaining the nation’s energy sector.

U.S. Military Intervention and Control
On January 3, 2026, U.S. forces captured President Maduro in a bold military operation. President Donald Trump announced that the U.S. would “run Venezuela” until a safe and proper political transition could occur. This move effectively placed Venezuelan oil operations under U.S. control for the first time since nationalization, though questions of legality under international law remain.

A Century of Oil Politics
Venezuela’s oil history reflects a broader struggle over sovereignty, foreign influence, and economic power. From early 20th-century foreign dominance to 21st-century military control, the country’s oil reserves have remained central to both national identity and global energy markets.